TMI Blog2019 (10) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... nstrued and applied, whether prospectively or retrospectively. As far as the tobacco dealers are concerned, a comparison of the first and second Notifications does not reveal anywhere the intention that the word chewing tobacco had been inadvertently omitted, originally. The use of the word substituted only means that, going forward, the second Notification will take the place of the first Notification. By virtue of the second Notification having come to be, the first stands effaced. This much is clear. However, there is nothing else in the second Notification or any other explanatory instruction/circular/note that has been brought to my attention to lead me to a conclusion that the substitution was to take effect from the date of the first Notification itself. By virtue of the second Notification, an entirely new commodity has been brought within the beneficial sweep of the exemption, marking a departure in the original intention of the legislature as to the range of products that would be so entitled - if at all the intention that the second Notification were to act retrospectively were to be attributed to Legislature, such intention should be manifest or at least disce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steels) Electric and Electronic goods, (Makkal Stores) and Manufacturers and sellers of Chewing Tobacco (Angumari Trading Company and Tamil Nadu Scented Chewing Tobacco Manufacturers Association). 3. In the case of the Tobacco manufacturers and dealers beedi, beedi tobacco, tobacco leaves, snuff and cheroot had been exempted from tax under Notification G.O.Ms. No.146 Commercial Taxes and Registration (B2) Department on 08.08.2007. A representation had been made by the manufacturers/dealers requesting inclusion of chewing tobacco also in the Exemption Notification. This was accepted and a Notification issued in G.O. Ms.No.149 dated 12.10.2009. Both the first and second Notifications are extracted below for the sake of clarity: ANNEXURE NOTIFICATION In exercise of the powers conferred by sub-section (1) of section 30 of the Tamil Nadu Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006), the Governor of Tamil Nadu hereby makes an exemption in respect of tax payable under the said Act on the sale of beedi, beedi tobacco, tobacco leaves, snuff and cheroot. 2. This Notification shall be deemed to have come into force on the 1st April 2007 M.DEVARAJ, SECRETARY T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to as the principal Act), for sub-section (4), the following subsection shall be substituted, namely:- (4)(a) Notwithstanding anything contained in sub-section (2), but subject to the provisions of sub-section (1), every dealer, who effects second and subsequent sales of goods purchased within the State, whose turnover relating to taxable goods, for a year, is less than rupees fifty lakhs may, at his option, instead of paying tax under sub-section(2), pay a tax, for each year, on his turnover relating to taxable goods at such rate not exceeding one per cent, as may be notified by the Government. Such option shall be exercised by a dealer,- (i) Who commences business, within thirty days from the date of commencement of the business; (ii) Whose turnover relating to taxable goods is below rupees fifty lakhs during the previous year, on or before the 30th day of April of the year for which he exercises such option; (iii) for the year 2008-2009, within thirty days from the date of commencement of the Tamil Nadu Value Added Tax (Second Amendment) Act, 2008: Provided that such dealer shall not collect any amount by way of tax or purporting to be by way of tax: Prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of 0.5% and in excess of eligible turnover, at regular rate. 8. The revenue had taken the stand then that once an assessee had achieved turnover of even a rupee more than Rupees Fifty lakhs, it exposes itself to the rigours of a regular assessment in respect of the entirety of its turnover for that very year. 9. According to the petitioners, it is in the light of this contested position that the 2011 Amendment should be viewed and interpreted. This Amendment clarifies that the liability to tax shall be two-fold, presumptively in respect of the eligible turnover upto Rupees Fifty lakhs and at regular rate in respect of the turnover in excess of the eligible turnover. Since the Amendment is clarificatory, it was clearly intended to remove doubts that arose from the implementation of the 2008 Amendment and the 2011 Amendment is thus to be implemented retrospectively, for period prior to the date of amendment as well. 10. Detailed submissions have been advanced by Mr.S.Elamurugan, Mr.K.Thangavelu, Mr.S.Rajasekar, learned counsel for the petitioners as well as Mr.Mohammed Shaffiq, learned Special Government Pleader for the Commercial Taxes Department on the law relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition to the notified ports contained originally, several other ports were also included and the benefit was extended to the newly included ports as well. The contention of the assessee therein was that the subsequent notification having substituted the words 'Ludhiana, Hyderabad, Nagpur, Agra, Faridabad, Jaipur, Guntur and Varanasi for the original two ports that is 'Ludhiana and Hyderabad , the benefit under the original Notification would be available to all the subsequently included ports including Guntur, from date of original Notification, that is, from 01.04.1997 itself. Per contra, the contention of the revenue was that exports of tobacco during the period 01.04.1997 to 26.11.1997 would not qualify for the incentive. 16. The Court reiterated the settled position that an exemption notification must be construed having regard to the objects and purposes which the same seeks to achieve. In determining the effect of the second notification, the Bench took into account the observations of an earlier Division Bench of the Supreme Court in the case of Ramkanali Colliery of BCCL vs. Workmen by Secretary Reshtriya Colliery Mazdoor Sangh [(2001) 4 SCC 236], wherein the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of supplying an obvious omission in the existing Act/Notification. If it did, then the subsequent Act/Notification would relate back in time to when the prior act had been passed. 18. In Indian Tobacco Association (supra), the Court held that the Notification in question was intended to give a benefit, in general, to all exporters. Such a benefit, originally intended to all cultivators of Tobacco should not be denied to those in Guntur and some other regions that had been omitted to be mentioned in the original Notification, particularly, when it is not the intention of the authorities to carve out any exception to the original incentive scheme. Thus, having regard to the objects, as discernible from the Scheme, that it was always intended that all tobacco cultivators were to receive a uniform benefit, a construction and interpretation in line with this object was given in that case and the claim of the assessee/dealers allowed. 19. In Shakti Masala (P) Ltd. V. The Assistant Commissioner (CT) (2013 (64) VST 385) a learned Single Judge of this Court considered the import of an exemption granted to chilly, coriander and turmeric and whether such exemption would als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (ii) had never been in contemplation of the taxing authorities. 22. The observations of the Supreme Court in Cooperative Company Ltd. Vs. Commissioner of Trade Tax, U.P [(2007) 4 SCC 480], in the context of whether amendments effected to Section 3AB inserted in the U.P. Trade Tax Act, 1948 (for short, 'the Act') on 01.08.1990 were to be construed as clarificatory/declaratory and having retrospective effect are also pertinent: The Act having been brought into force from a particular date, no retrospective operation thereof can be contemplated prior thereto. The said provision furthermore contains a substantive provision which is itself a pointer to the fact that for the earlier period packing materials would not be exempted merely because main commodity is exempted from tax, but albeit subject to the condition that there was an agreement to sell in respect thereof. The amendment sought to deal with a matter which created some problem in implementation of the Act. 23. In Bhagat Ram Sharma Vs. Union of India and Others [1988 (Supp) SCC 30], the Bench states, 15. That takes us to the next and last contention of the appellant that Regulation 8(3) of the Regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficial construction and if it is capable of two interpretations, the Courts must prefer that construction which permits the beneficent purpose behind it. When language of a statute is free from ambiguity, no duty is cast upon the Court to do anything more than to give effect to the word or words used. We do not mean to say that there might not be something in the context of an Act of Parliament, or to be collected from its language, which might give to words prima facie prospective a larger operation, but that ought not to receive a larger operation unless you find some reason for giving it. Now, it would be seen that cl.(5) similarly 'substituted' new Regulation 6(1) dealing with the salary and allowances payable to the Chairman and other Members of the Public Service Commission, and underneath appears the following: Notwithstanding anything contained in the Regulations, clause (i) of the proviso to sub- regulation (I) shall be deemed to have come into effect from 1.11.1956. 24. In Shyam Sunder and Others Vs. Ram Kumar and Another [(2001) 8 SCC 24], a Three Judge Bench of the Supreme Court states thus:- During the course of argument, a half-hearted argument wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure. The general rule as stated by Halsbury in Vol. 36 of the Laws of England (3rd Edn.) and reiterated in several decisions of this Court as well as English courts is that all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospectively and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. 26. In Zile Singh Vs. State of Haryana and Others [(2004) 8 SCC 1], a three Judge Bench of the Supreme Court states authoritatively as follows:- 13.It is a cardinal principle of construction that every statute is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the Statute retrospectivity. Four factors are suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and (iv) what it was the legislature contemplated (p.388). The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right (p.392). 18. In a recent decision of this Court in National Agricultural Cooperative Marketing Federation of India Ltd. And Another Vs. Union of India and Others, (2003) 5 SCC 23, it has been held that there is no fixed formula for the expression of legislative intent to give retrospectivity to an enactment. Every legislation whether prospective or retrospective has to be subjected to the question of legislative competence. The retrospectivity is liable to be decided on a few touchstones such as : (i) the words used must expressly provide or clearly imply retrospective operation; (ii) the retrospectivity must be reasonable and not excessive or harsh, otherwise it runs the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n will take the place of the first Notification. By virtue of the second Notification having come to be, the first stands effaced. This much is clear. 30. However, there is nothing else in the second Notification or any other explanatory instruction/circular/note that has been brought to my attention to lead me to a conclusion that the substitution was to take effect from the date of the first Notification itself. By virtue of the second Notification, an entirely new commodity has been brought within the beneficial sweep of the exemption, marking a departure in the original intention of the legislature as to the range of products that would be so entitled. I am of the view that if at all the intention that the second Notification were to act retrospectively were to be attributed to Legislature, such intention should be manifest or at least discernible from the Notification itself, from the objects thereof, or at the least, draw support from some tangible material. Retrospectivity of application of an Act/Notification/Provision cannot be an incident that is assumed in vaccum or a request that can be accepted for the mere asking. 31. The petitioner makes much of the fact that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tandards other than food grade 2096 5 percent 120. Sago and starch of all kinds 2120 5 percent 132A. Sugar of all kinds , that is to say, cane sugar, beet sugar, chemically pure sucrose in solid form and imported sugar of all kinds 2155 5 percent PART C (See sub-section (2) of Section 3) Entry No. Description of Goods Commodity Code Number Rate of Tax 1. Mirrors of all kinds 349 14.5 per cent 33. Thus, where legislature intended that upon mere mention of a commodity, all forms and descriptions of the commodity would stand encompassed, it is seen to employ the phrase 'of all kinds' or of all sorts . There is thus no force in the argument of the petitioner that mere mention of tobacco and cheroot should be taken as including chewing tobacco as well. If this had been the intention of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, so that if the turnover relating to taxable goods of a dealer paying tax under clause (a), in a year, reaches rupees fifty lakhs at any time during that year, such dealer is liable to pay tax under subsection (2) of that section on all his sales of taxable goods above rupees fifty lakhs. 3. The Government have decided to amend the Tamil Nadu Value Added Tax Act, 2006 (Tamil Nadu Act 32 of 2006) suitable for the purpose. 4. The Bill seeks to give effect to the above decision. (highlighting supplied for emphasis) 38. The use of the word rectify and the analysis of the reasons for insertion of this amendment in the first paragraph wherein it is captured that a higher rate of tax would be payable by a dealer even in respect of turnover where he has not collected taxes leaves me in no doubt that the amendment was inserted only to correct an unintended anomaly that arose in the operation of the law, by virtue of the amendment inserted in 2006. 39. A learned Single Judge of this Court sitting in the Madurai Bench has considered the amendment to Section 3(4) of the Act concluding that the Act would have to be retrospectively applied in Tvl.Shanmugamari Timbers V. The Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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